Blockchain technology impact stretches way beyond Bitcoin
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Blockchain technology – the foundation beneath Bitcoin – has “immense potential to disrupt and transform the world of money, business, and society” in the years ahead.
The technology tops a new list of IT projections from Dimension Data, which also cites artificial intelligence, machine learning, robotics, and virtual and augmented reality as having the greatest potential to deliver disruptive outcomes and reshape digital business next year.
“Companies that have not started the digital investment cycle are at high risk of being disrupted,” says Dimension Data Group CTO, Ettienne Reinecke.
Blockchain, he says, has gone from strength to strength.
“Last year, when we looked at the top digital business trends for 2017, we predicted that centralised transaction models would come under attack. We were spot on. In the financial services sector, we’ve seen the US and European capital markets moving onto Blockchain platforms, and similar activity in markets such as Japan. Considering how conservative and compliance-focused this sector is, that’s quite remarkable.
“It’s ironic that the cybercriminals who perpetrated the recent WannaCry ransomware attack could hold a federal government to ransom and demand to be paid in Bitcoin. Bitcoin might be a crypto-currency, but it’s based on Blockchain, and if cybercriminals are confident that Bitcoin provides a safe mechanism for the payment of ransoms, it indicates just how secure the distributed ledger approach is. I believe that Blockchain has the potential to totally re-engineer cybersecurity, but the industry has yet to come to terms with it,” says Reinecke.
He predicts Blockchain will also deliver on the promise of Internet of Things (IoT) in the year ahead. “In the world of IoT you’re generating millions of small transactions that are being collected from a distributed set of sensors. It’s not feasible to operate these systems using a centralised transactional model: it’s too slow, expensive, and exclusive. To extract the true value from IoT technology you have to be able to operate in real time. Once a sensor alert is received from a control system you must react to it, meter it, and bill for it instantly – all of which negates the viability of a centralised transactional authority. The cost of the transaction has to be near-zero or free, and the cost elements of a centralised model simply don’t support the potential business model in IoT,” he explains.
“Companies that have not started the digital investment cycle are at high risk of being disrupted,”
In 2018, some interesting applications of Blockchain and IoT in the area of cybersecurity will emerge. Significant attacks have recently been launched from low-cost IoT endpoints, and there’s very little incentive for manufacturers of these devices to incur the cost of a security stack, which leaves them extremely vulnerable. Blockchain can play a fundamental role in securing these environments.
Wireless feeds IoT
Another exciting trend to look forward to is the boom in new wireless technologies that will enable IoT and bring us a step closer to the dream of pervasive connectivity. Some of these advancements will include 5G and Gbps Wi-Fi, new controls, virtual beacon technology, and low power, long distance radio frequency.
There’s also a “digital fight-back” coming on the part of certain incumbent players. Established businesses that have proactively transformed into digital businesses, modernised their architectures, and embedded high levels of automation into their operations have a window of opportunity to claw back market share in the year ahead. That’s because there’s been an increase in the number of cloud-born start-ups themselves starting to be disrupted in certain industries.
“I predict that a number of digitally transformed incumbents will successfully start reclaiming their markets because they have more credibility, longer histories, an established customer base, and assets that can stand the test of time,” says Reinecke.
Andy Cocks, CTO for Dimension Data Asia Pacific, concurs with Reinecke and adds: “Blockchain has immense potential to disrupt and transform the world of money, business, and society. But, it is the companies that have not started the digital investment cycle which are at the highest risk of being disrupted.”
Questions & Answers
Q.Which specific industries has Blockchain technology already started to impact, according to Dimension Data?
Which specific industries has Blockchain technology already started to impact, according to Dimension Data?
In the financial services sector, US and European capital markets have moved onto Blockchain platforms. Similar activity has also been observed in markets such as Japan, despite the sector's conservative and compliance-focused nature.
Q.Why is Blockchain considered a suitable technology for the Internet of Things (IoT) according to the CTO?
Why is Blockchain considered a suitable technology for the Internet of Things (IoT) according to the CTO?
Blockchain is suitable for IoT because it can handle millions of small, distributed transactions in real-time. Centralised models are too slow and expensive for IoT, whereas Blockchain supports the need for near-zero cost transactions and instant reactions to sensor alerts.
Q.How might Blockchain technology contribute to improving cybersecurity in the future?
How might Blockchain technology contribute to improving cybersecurity in the future?
Blockchain has the potential to re-engineer cybersecurity, particularly in securing vulnerable IoT environments. It can play a fundamental role where manufacturers have little incentive to add costly security to low-cost devices, as seen with recent attacks from IoT endpoints.
Q.What is the key risk for companies that have not yet invested in digital transformation?
What is the key risk for companies that have not yet invested in digital transformation?
Companies that have not yet started their digital investment cycle face a high risk of being disrupted. They could lose market share to established businesses that have transformed, modernised architectures, and embedded automation, especially as cloud-born start-ups also face disruption.